‘The Aspen Way’ should mean creative pricing, not peace and love
It was kind of shocking to see Aspen Skiing Co. shocked by the fact that price impacts buyers (“Snowmass $6.50 lift ticket sales shock Aspen Skiing Co.,” Nov. 6, The Aspen Times). That is basic Econ 101 stuff, or even something learned at the lemonade stand you set up in front of your house.
Skico seems to be willing to be very alternative with their marketing campaign (the Aspen way — love, respect, unity and commit). How about applying some of that thinking to their business practices? Given the demand for $6.50 lift tickets (12,000 to ski in mid-December?), maybe they should consider a massive price-cut for various types of lift tickets. Skico makes money in lots of ways: food, drink, rentals, ski school, lodging, etc. How important is lift ticket cost as a source of revenue? Skico is willing to think outside-the-box for marketing, and get in front of environmental issues, but remains super-duper boring and conservative with their business practices.
All the mountains raise lift-ticket costs every year. How boring and predictable. What would happen if you could ski our four mountains for, let’s say, $50 a day? Could Skico make enough money from their other revenue streams to offset the loss of revenue from a much lower priced lift ticket?
Figuring out the “right” ticket price to maximize revenue for Skico and for Aspen in general is doubtless tricky, but it does seem like Skico hasn’t been particularly creative in their thinking. For example, cruise ships use a dynamic algorithm to ensure they never leave port with an empty room. This means that they are at times giving rooms away for as little as $100, knowing that they will generate revenue from their customers once they leave port.
Broadway has an app that releases unsold tickets for a lesser price on the day of performances, ensuring the seats in the house are full and the producers can make money on those high-priced concessions. By the same logic, running the lift costs the same amount whether there is a line to get on, or a bunch of empty chairs heading up. Once up, those skiers might pay the $45 for a cheese pizza at the top of Snowmass. Given the demand for a basically free ticket for an early season Friday, why not listen to what the market is clearly saying — ticket prices are too high. Why not try cutting prices and see if having thousands of additional skiers every day isn’t more profitable?
And think of the money saved on the marketing budget. Ski for free kicks the crap out of love, respect, unity and commit. Here’s an idea: Why not hire a few people from outside “the industry” who might have some new ideas to add to the mix? The old ideas are just that, old.